Party-line split on high-risk pools

The first major decision for the states under the new health care law—on establishing high risk insurance pools—has come and gone with the decisions so far made mostly along party lines.

By the Friday deadline, most Democratic governors largely decided to help the Department of Health and Human Services by creating the pools themselves with federal funding.

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Most Republican governors decided to allow the federal government to establish its own high-risk insurance pool in their states, essentially punting.

The pools, which are temporary until 2014, could be a telling sign of how well the states and federal government work together on putting the rest of the overhaul into action.

The pools need to be in place one way or the other by this summer to help adults with pre-existing conditions buy insurance coverage. Many such adults have trouble finding insurers at reasonable cost.

Not all states have responded to HHS yet. But of those that did, 15 said they would leave the job to HHS. Twenty eight states, plus the District of Columbia, agreed to do the work under contract.

HHS spokeswoman Jenny Backus said the department was pleased with the results from the states.

“We … look forward to working together to provide people who have been denied coverage for so long, access to some much needed relief through the creation of temporary high-risk pools,” she said in a statement. “Whether states create these pools or the federal government creates them for states, the pools will be paid for by 100 percent federal dollars and most importantly —- uninsured people around the country will soon have access to another affordable coverage option.”

The department had assumed that some states would opt to have HHS implement the program – some states are so small that they could even benefit from having their residents in a larger, federal pool that spreads the risk among more people.

But the results show just how divisive the health reform plan still is.

Of the 15 states that turned down the contract, three are led by Democratic governors – Wyoming, Tennessee and Delaware. Many of those that turned it down cited concern that the $5 billion HHS had set aside for the pools wouldn’t be enough and that the states would be left with the tab. HHS told state officials in a conference call recently that they wouldn’t let that happen.

“After careful analysis of the new law, consultation with state health and insurance officials and communications with state lawmakers and HHS, the state of Texas cannot today commit to operating the new high-risk pool due to the lack of program rules or reliable federal funding,” Texas Gov. Rick Perry said late on Friday. “I do not believe the aggressive implementation and the lack of assurances on financial solvency of the program are in the best interest of Texas taxpayers, families, patients or health care providers.”

Of the 28 states that said they would do the work themselves, only seven are led by Republicans –Alaska, California, New Jersey, Connecticut, Rhode Island, South Dakota and Vermont. The states will pursue federal contracts to do the work will get a piece of the $5 billion allocated to the program.

Many of the states that are doing the pools already have similar pools in place and would only need to expand or tweak the program to meet the federal requirements.